2007-02-22 08:00:30 CET
2007-02-22 08:00:30 CET
REGULATED INFORMATION
Honkarakenne Oyj - Financial Statement Release
HONKARAKENNE OYJ’S REPORT ON ACCOUNTS 1 JANUARY – 31 DECEMBER 2006
HONKARAKENNE OYJ'S REPORT ON ACCOUNTS 1 JANUARY - 31 DECEMBER 2006 Honkarakenne's consolidated net sales of 2006 amounted to EUR 84.9 million, compared with EUR 78.3 million in the same period last year. The net sales were increased by Oy Timberheart Ltd., whose financial statements will be entirely consolidated in the group as required by IFRS. The comparable profit amounted to EUR 80.6 million in 2006. Income before taxes showed a loss of EUR 1.8 million (a loss of EUR 1.2 million in the previous year). The Board of Directors will propose that no dividend is paid for 2006. Net sales increased by 9 per cent when compared with last year. The growth is mainly due to exports in Central Europe and, more specifically, in Germany and France. Meanwhile, the domestic net sales decreased by 3 per cent. The operative result for the first part of the year did not meet the expectations. This is due to lower net sales in the previous winter, one-time expenses related to running in the new technology in the main mills, the increase in raw material expenses in the fall, the weakening Yen and recording Oy Timberheart Ltd's one-time expenses in the third quarter. Turnover is increasing Net sales and profit of the last quarter fulfilled the set objectives. The EUR 24.4 million net sales were 14 per cent higher than the corresponding figures of the same period in 2005 (EUR 21.4 million). Resulting mainly from increased net sales, the fourth quarter's profit before taxes, EUR 0.6 million, also marked an improvement over last year's result (a profit of EUR 0.4 million). Honkarakenne Group's order book amounted to EUR 33 million (EUR 29 million) at the end of December. The order book was 11 per cent bigger than the corresponding figure from last year. Affiliated and associated companies The Paltamo factory was spinned off to Finwood Oy as of 1 March 2006. Finwood Oy focuses on small, standard model round log cabins, saunas and courtyard products. For the time being, the production is mainly sold through Honkarakenne Oyj's sales network, but the company is also selling its products directly to both domestic and international markets. A substantial increase to Paltamo's sales and production levels is the objective of these changes. The purchase of shares completed in January 2006 made Honkarakenne a 38% minority shareholder in TimberHeart Ltd, a Lahti-based company selling and marketing wooden houses. The company's net sales amounted to EUR 4.3 million last year. The frames and wooden parts of the Timberheart houses are manufactured in Honkarakenne's production facilities. During the fall, Honkarakenne started to manage also their logistics. Timberheart's focus is on designing, selling and marketing of high-quality, individual single family homes and vacation homes with a frame structure for both domestic and international markets. Last summer a decision was brought in to give up the company's real estate development activities. Market situation In spite of good market situation in the domestic markets, the targets set for the volumes and results in domestic sales were not achieved. The last quarter of the year involved reorganization of domestic sales and marketing and the restructuring of Honka-Kodit Oy's business operations under Honkarakenne's sales of single-family homes. In addition, the sales of vacation homes and the sales of single-family homes have been differentiated into independent profit centers. The sales expectations for the last quarter of the year were achieved and, thanks to good order book, the domestic situation in the beginning of the year is clearly better than the last year. The net sales objective was met in the Eastern Europe market area. A delivery contract for 100 homes to Kazakhstan was signed in last July. The deliveries started in the fall and they will be completed during the summer of 2007. The Far East sales will focus on Japan. The net sales objective in Yen set for the last year was achieved, yet due to weaker Yen, the targeted net sales in Euro fell short. The profitability of exports in Japan also fell significantly. In Central Europe, the turnover in Germany increased by over 30 per cent in comparison with the last year. Thanks to the realized changes in subsidiary management in 2005 and 2006 the sales have taken off. Meanwhile, the distribution network has consistently been developed and renewed. The sales for the last fall were predictably lower because of the increase in value-added tax put into effect in the turn of the year. The turnover in France grew nearly by 50 per cent from the previous year's level. The coverage of the distribution network and its quality has been improved. The successful sales in the fall give a good push for the current year. Steps were taken in the USA to run down the local subsidiary, and its exports were taken over by the regional importers during the previous year. At the same time, all the remaining franchising contracts were changed into importer-based contracts. The realized changes will make the US exports profitable. Financing and investments The financial position of the company has remained stable. The equity ratio stood at 38 per cent (42%) and interest-bearing net liabilities at EUR 12 million (EUR 15 million). Liquid assets totaled EUR 4.1 million (EUR 2.1 million). Gearing was at 66% (76%). Capital expenditure totaled EUR 2.6 million (EUR 6.8 million). The investments were primarily targeted at replacement investments, development of information systems for better internal efficiency, exhibition grounds and business premises. The investments for the current year will remain low. Own shares Honkarakenne Oyj has repurchased 14,310 shares during the period under review for the average price of EUR 5.61 per share. At the end of the review period the company held 28,544 of its B shares with a total nominal value of EUR 57,088 and a total purchase price of EUR 153,297. These shares represent 0.76% of the company's capital stock and 0.30% of the voting rights. The purchase cost has been deducted from shareholders' equity. The Board of Directors has been granted a share repurchase authorization, valid until 7 April 2007, to repurchase company shares for an amount equivalent to a maximum of 5% of the company's capital stock. The Board of Directors has also been granted authority, also valid until 7 April 2007, to dispose of 187,448 B shares. Future Outlook Honkarakenne Group's order book amounted to EUR 39.4 million (28.5 MEUR) on 16 February 2007, i.e. the order book was 38 per cent bigger than the corresponding figure from last year. The net sales of the first quarter of 2007 will clearly exceed this year's figure for the same period. The raw material prices of logs and sawn timber increased more than expected in the fall, which will have a negative impact on the result of the beginning of the year until the increased prices can be transferred to sales prices in full. Thanks to good order book Honkarakenne Group has for year 2007 good preconditions for a profitable result, even though the price of wooden raw material has considerably risen over the last fall and the current winter. Raising the internal efficiency, concentrating on short term actions to raise the cost efficiency and lightening the cost structure will increase the group's competitiveness and profitability. HONKARAKENNE OYJ Board of Directors For more information, please contact: Managing director Esko Teerikorpi, tel. +358 20 575 7816, +358 40 580 6111, esko.teerikorpi@honka.com. Honkarakenne Oyj's general meeting will be held 30 March 2007 at 2 p.m. in the company headquarters in Tuusula. The annual report of 2006 will be published in the company web pages www.honka.com in week 11. The interim report for January-March 2007 will be published 3 May 2007. DISTRIBUTION Helsinki Stock Exchange Principal media -------------------------------------------------------------------------------- | CONSOLIDATED INCOME | | | | | | | STATEMENT | | | | | | -------------------------------------------------------------------------------- | | 2006 | 2005 | 2006 | 2005 | | -------------------------------------------------------------------------------- | (MEUR) | 10-12 | 10-12 | 1-12 | 1-12 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 24.4 | 21.4 | 84.9 | 78.2 | | -------------------------------------------------------------------------------- | Change in inventories | -2.0 | -2.2 | -1.6 | -2.6 | | -------------------------------------------------------------------------------- | Production for own use | 0.1 | 0.0 | 0.2 | 0.1 | | -------------------------------------------------------------------------------- | Other operating income | 0.8 | 0.5 | 2.0 | 1.7 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Materials and services | 13.3 | 11.3 | 51.3 | 45.6 | | -------------------------------------------------------------------------------- | Staff costs | 4.3 | 3.8 | 16.6 | 15.5 | | -------------------------------------------------------------------------------- | Depreciations | 0.8 | 1.1 | 4.0 | 4.1 | | -------------------------------------------------------------------------------- | Other operating expenses | 4.0 | 3.0 | 14.7 | 13.0 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit/loss | 0.7 | 0.5 | -1.3 | -0.8 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income and | -0.1 | -0.1 | -0.5 | -0.5 | | | expenses | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss before taxes | 0.6 | 0.4 | -1.8 | -1.2 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Taxes | -0.4 | 0.1 | 0.2 | 0.4 | | -------------------------------------------------------------------------------- | Minority share | 0.0 | 0.0 | 0.0 | 0.0 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss for the | 0.2 | 0.5 | -1.6 | -0.9 | | | period | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE | | | | | | | SHEET | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | (MEUR) | 31.12.0 | 31.12.0 | | | | | | 6 | 5 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | | | | -------------------------------------------------------------------------------- | - Intangible assets | 1.3 | 0.4 | | | | -------------------------------------------------------------------------------- | - Tangible assets | 25.4 | 28.7 | | | | -------------------------------------------------------------------------------- | - Loans and other | 0.9 | 1.3 | | | | | receivables | | | | | | -------------------------------------------------------------------------------- | - Deferred tax assets | 1.3 | 1.0 | | | | -------------------------------------------------------------------------------- | - Investments | 0.7 | 1.0 | | | | -------------------------------------------------------------------------------- | Total | 29.6 | 32.4 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | | | -------------------------------------------------------------------------------- | - Inventories | 15.7 | 14.3 | | | | -------------------------------------------------------------------------------- | - Receivables | 9.4 | 7.4 | | | | -------------------------------------------------------------------------------- | - Cash and bank | 4.1 | 2.1 | | | | | receivables | | | | | | -------------------------------------------------------------------------------- | Total | 29.2 | 23.8 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 58.8 | 56.2 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity and | | | | | | liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital stock | 7.5 | 7.5 | | | | -------------------------------------------------------------------------------- | Other capital and | 10.1 | 11.8 | | | | | reserves | | | | | | -------------------------------------------------------------------------------- | Total | 17.6 | 19.3 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority share | 0.0 | 0.0 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Long-term liabilities | | | | | | -------------------------------------------------------------------------------- | Loans | 11.9 | 11.4 | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 1.3 | 1.3 | | | | -------------------------------------------------------------------------------- | Provisions | 0.2 | 0.2 | | | | -------------------------------------------------------------------------------- | Other liabilities | 0.0 | 0.1 | | | | -------------------------------------------------------------------------------- | Total | 13.4 | 13.0 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Short-term liabilities | | | | | | -------------------------------------------------------------------------------- | Loans | 3.8 | 5.4 | | | | -------------------------------------------------------------------------------- | Accounts payable and | | | | | | | other | | | | | | -------------------------------------------------------------------------------- | liabilities | 23.9 | 18.5 | | | | -------------------------------------------------------------------------------- | Total | 27.7 | 23.9 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total shareholders´ | | | | | | | equity | | | | | | -------------------------------------------------------------------------------- | and liabilities | 58.8 | 56.2 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY INDICATORS | 2006 | 2005 | | | | -------------------------------------------------------------------------------- | | 1-12 | 1-12 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share | -0.42 | -0.23 | | | | | (EPS), EUR | | | | | | -------------------------------------------------------------------------------- | Equity per share, EUR | 4.7 | 5.2 | | | | -------------------------------------------------------------------------------- | Equity ratio, % | 37.7 | 41.6 | | | | -------------------------------------------------------------------------------- | Interest-bearing net | | | | | | -------------------------------------------------------------------------------- | liabilities (MEUR) | 11.7 | 14.7 | | | | -------------------------------------------------------------------------------- | Gearing, % | 65.7 | 76.4 | | | | -------------------------------------------------------------------------------- | Gross investments (MEUR) | 2.6 | 6.8 | | | | -------------------------------------------------------------------------------- | % of net sales | 3.1 | 8.7 | | | | -------------------------------------------------------------------------------- | Average number of | 428 | 420 | | | | | personnel | | | | | | -------------------------------------------------------------------------------- | Order book (MEUR) | 32.6 | 29.4 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW STATEMENT | | | | | -------------------------------------------------------------------------------- | (MEUR) | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from | +4.7 | +3.3 | | | | | operations | | | | | | -------------------------------------------------------------------------------- | Cash flow from | -2.4 | -6.4 | | | | | investments, net | | | | | | -------------------------------------------------------------------------------- | Total cash flow from | -0.2 | +1.4 | | | | | financing | | | | | | -------------------------------------------------------------------------------- | Increase in credit | +3.2 | +5.9 | | | | | capital | | | | | | -------------------------------------------------------------------------------- | Decrease in credit | -3.6 | -3.9 | | | | | capital | | | | | | -------------------------------------------------------------------------------- | Dividends paid | 0.0 | -0.9 | | | | -------------------------------------------------------------------------------- | Other financial items | +0.2 | +0.3 | | | | -------------------------------------------------------------------------------- | Change in liquid assets | +2.0 | -1.7 | | | | -------------------------------------------------------------------------------- | Liquid assets at | | | | | | -------------------------------------------------------------------------------- | the beginning of period | +2.1 | +3.8 | | | | -------------------------------------------------------------------------------- | Liquid assets at | | | | | | -------------------------------------------------------------------------------- | the end of period | +4.1 | +2.1 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONTINGENT LIABILITIES | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | (MEUR) | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | For own loans | | | | | | -------------------------------------------------------------------------------- | - Mortgages | 20.0 | 20.9 | | | | -------------------------------------------------------------------------------- | - Pledged shares | 0.18 | 0.18 | | | | -------------------------------------------------------------------------------- | For others | | | | | | -------------------------------------------------------------------------------- | - Guarantees | 1.49 | 0.74 | | | | -------------------------------------------------------------------------------- | Leasing liabilities | 0.30 | 0.64 | | | | -------------------------------------------------------------------------------- | Rent liabilities | 0.42 | 0.44 | | | | -------------------------------------------------------------------------------- | Other liabilities | 0.00 | 0.10 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | (1000 EUR) | | | | | | -------------------------------------------------------------------------------- | | Share | Premium | Reserve | Retained | Total | -------------------------------------------------------------------------------- | | capital | fund | fund | earnings | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1.1.2005 | 7,498 | 520 | 5,316 | 7,842 | 21,176 | -------------------------------------------------------------------------------- | Repurchase of own shares | | | | -57 | -57 | -------------------------------------------------------------------------------- | Translation difference | | | | -36 | -36 | -------------------------------------------------------------------------------- | Result of the period | | | | -853 | -853 | -------------------------------------------------------------------------------- | Dividends | | | | -937 | -937 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 31.12.2005 | 7,498 | 520 | 5,316 | 5,959 | 19,293 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1.1.2006 | 7,498 | 520 | 5,316 | 5,959 | 19,293 | -------------------------------------------------------------------------------- | Translation difference | | | | -12 | -12 | -------------------------------------------------------------------------------- | Result of the period | | | | -1,559 | -1,559 | -------------------------------------------------------------------------------- | Repurchase of own shares | | | | -80 | -80 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 31.12.2006 | 7,498 | 520 | 5,316 | 4,308 | 17,642 | -------------------------------------------------------------------------------- The figures of this report are in full compliance with IFRS valuation. The figures are unaudited.
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